Efforts by ReconAfrica, a deceptively named Vancouver-based mining company, to drill for oil in land adjacent to a sensitive UNESCO World Heritage Site on the border of Namibia and Botswana, appear to be coming up dry.
ReconAfrica had previously claimed that there were 120 billion barrels of oil beneath land just outside the Okavango Delta in Namibia, named an international heritage for its significance to the San Indigenous people and home for endangered species, such as cheetah, white rhinoceros, black rhinoceros, African wild dog, lions and, most crucially, endangered savanna elephants.
The company’s lease encompasses three national parks — Bwabwata in Botswana, and Khaudum and Mangetti in Namibia.
Fortunately for supporters of Indigenous rights and the environment, it turns out, as Harvard geologist Paul Hoffman put it in an interview with Rolling Stone, “that mining companies are often better at drilling into investors’ wallets than they are at drilling into rocks.”
With Canada proudly boasting its international climate commitments to reach net zero greenhouse gas emissions by 2050, the activities of Canadian extractive companies abroad warrant heightened scrutiny. Nowhere more so than the African continent, where residents have to deal with the worst consequences for the climate crisis they didn’t create.
Offloading carbon emissions to the developing world
Karen Hamilton, the director of Above Ground, a human rights and corporate accountability organization, told Ricochet that companies like ReconAfrica are seizing upon weaker regulatory structures abroad to engage in extractive processes that would be unacceptable at home.
“The emissions and the consequences of that production aren't felt in Canada. They're not in our nationally determined contributions. It's not something that we talk about domestically. The impacts are felt everywhere, but they're not discussed in the context of Canada's climate commitments,” said Hamilton.
Had ReconAfrica found the oil they were looking for, it would have made a few people a lot of money while trapping Namibia and neighbouring Botswana into fossil fuel dependency and cooking the planet in the process.
The oil itself, and the profits it makes, would go largely towards fuelling lavish lifestyles outside the continent. Half of people in sub-Saharan Africa, or 597 million people, don’t have access to electricity. They won’t be the ones benefiting from an oil bonanza, despite the company founder Craig Steinke’s paternalistic rhetoric about “energy independence.”
“How do you even have another industry if you don’t have energy?” Steinke told the Globe and Mail, ignoring the abundant solar and wind resources in the region. “It can’t be done. This area needs help.”
While there are weaker regulations in the developing world, Hamilton noted that Canadian fossil fuel companies in Africa face the same issues of lack of consent from local populations as they do at home.
“There is a corporate culture around engagement with local rights holders, which has a very poor track record. We're not seeing better practices taking place abroad by any means,” she said.
Rolling Stone reporter Jeff Gooddell, who reported from the site of ReconAfrica’s drilling, wrote that concern about a lack of consultation with impacted communities “was widely echoed by virtually everyone” he spoke to.
Goodell’s translator, local activist Stefan Kudumo, expressed this frustration when he asked, “Why don’t they talk to the people whose lives are impacted most?”
According to a January 2022 complaint from the Legal Assistance Centre, a Namibian human rights organization, six families said ReconAfrica’s representatives “entered their properties without permission, concluded seismic survey activities, and compelled them to sign papers without explaining their contents before leaving.”
ReconAfrica Isn’t Alone
While ReconAfrica may be the most prominent example of Canadian fossil fuel extraction in Africa, buttressed by an RCMP investigation into allegations of bribing Namibian officials and securities fraud for misleading investors, it’s far from the only example of a Canadian company fuelling the climate crisis through its activities abroad.
Africa Energy Corp is involved in offshore drilling off the western and southern coasts of South Africa while Africa Oil Corp has licenses in Guyana, Kenya, Namibia, Nigeria, South Africa and in the Senegal Guinea Bissau Joint Development Zone. Both firms are Vancouver-based.
To its credit, beginning this year, Export Development Canada no longer provides financial assistance to fossil fuel projects abroad. But that hasn’t stopped the private sector from stepping up its assistance.
Canadian companies — RBC and Sun Life — provided almost US$2 billion for fossil fuel investments in Africa from January 2019 to July 2022, according to German climate and human rights organization Urgewald. Notably, both companies have committed to achieving net zero by 2050, providing a glaring example of the corporate “greenwashing” derided by former Canadian environment and climate change minister Catherine McKenna, who now chairs a UN group focused on reaching net zero.
Since 2019, RBC has loaned or underwritten over US$1 billion to companies expanding fossil fuel production. As of July 2022, Sun Life invested US$936 million, according to the data sourced from proprietary financial databases Bloomberg, Refinitiv and IJGlobal.
This is a small but disproportionate fraction — two per cent — of the $98 billion provided to African fossil fuel development from 352 financial institutions, including major American players such as BlackRock ($12 billion), Vanguard ($8.3 billion), Citigroup ($5.5 billion) and JP Morgan Chase ($5.1 billion).
RBC’s investments include $36 million in stocks and bonds in the East African Crude Oil Pipeline from Uganda to Tanzania, which runs through the basin of Africa’s Lake Victoria, Africa’s largest, and is set to displace 118,000 people, according to environmentalist group Stand.Earth.
Overall, RBC is now the world’s largest financier of fossil fuel projects, overtaking JPMorgan, with Canadian banks increasingly regarded as “lenders of last resort” for fossil fuel companies.
A History of Plunder
Evelyn Mayanja, a professor of interdisciplinary studies at Carleton University whose research focuses on the political economy of natural resource development in Africa, told Ricochet that the activities of Canadian companies abroad cannot be viewed outside the context of colonialism.
African countries were set up for failure, leaving them dependent on investment from wealthier countries, which allowed companies to come in and profit from their resources while leaving the people dependent on foreign aid.
African leaders, like Patrice Lumumba in the Democratic Republic of Congo or Thomas Sankara in Burkina Faso, who attempt to disrupt this dependency and take control over their countries’ resources are deposed by western powers in favour of more pliable leaders. The model of an obedient western client state was apartheid South Africa, which occupied Namibia — then known as South West Africa — until 1990.
This isn’t to say that all of the African continent’s problems are the fault of foreign powers, she emphasized.
“Yes, there's a gap of leadership. But that is also exacerbated by global policies that many times do not want to let Africa stand on its own,” Mayanja said.
Since its inception, the Canadian state’s colonial imperative has been rooted in a “mindset of going out there to take whatever is there” which represents a “psychological syndrome of greed,” which has international implications, Mayanja added.
As a result, fossil fuel corporations have an “appetite that is insatiable,” she said, leading them to exploit others’ resources before other companies can get to them.
With the end of the fossil fuel era upon us, Mayanja says there’s a “rush for what’s left.”
“Angry lions are rushing out to grab whatever's remaining out there without any ethics or moral or respect for humanity and the planet,” she said.
Mayanja said this explains why Canadian fossil fuel companies are so active abroad, despite the fact that Canada has the third-largest oil reserves in the world. She described the thought process as, “First take whatever is out there and maybe at a certain point, we'll come back and exploit what we can access back home.”
She cautioned that the apparent failure of ReconAfrica isn’t going to deter them from seeking oil elsewhere. “They will never stop until they have found what they are looking for,” she said. “They are very, very resilient.”
Financial institutions are part of this same money-making system, so naturally they would seek to earn profits of their own from the profits of fossil fuel companies, climate commitments be damned. Those commitments are only made to obtain social license for the same old extractivist activities, Manyanja said.
While it’s tempting to simply say the government needs to step in to prevent banks from investing in harmful extractive policies, Mayanja says any meaningful change must come from below. The responsibility, ultimately, is ours.
“We need to think in terms of dismantling the economic system,” she said. “How would that happen? It's a long process, but if even the Berlin wall collapsed, then nothing’s impossible.”